Location: What's the big deal?
According to Adrian Goslett, CEO of Re/Max of southern Africa, location refers to numerous elements that prospective buyers should consider before they decide to purchase a property. "The various factors are vital in the decision-making process as they will have an impact on the potential growth in the value of the property over a period of time. Essentially, these aspects will determine the price that can be achieved if the property is sold in the future, along with the possible income the property could generate by being rented out," he explained.
He noted that the first and most important element that location refers to is the area in which the property is situated. Goslett says that when looking at area, a good location is where there is growth and development, or at least the potential for significant growth. "It is important that the area's potential can support the demand for property over the long term and, subsequently, increase the value of the property in time. It is far better to purchase the worst house in the best area, than the best house in a not-so-good area," advised Goslett. "Where possible, buyers should find out more about the future development plans for the area that they are looking to buy in. Developments such as new industrial sites, new roads or railways, or even industrial activities, can vastly alter the price profile of an area," he warned.
Opt for an area with excellent infrastructure
It is advisable to opt for an area with excellent infrastructure, which is reflected in the provisions of service. "Areas that are neglected and suffer from poor service delivery are not good options. It is possible to spot these areas based on the general maintenance of the public land, pavements, parks and the state of the roads. Properties within neighbourhoods that are known to have high crime rates are also not good choices as these homes generally don't provide a much in terms of return on investment," said Goslett.
He noted that another aspect to consider when looking at a specific neighbourhood is the quality of the surrounding properties, as this could have an effect on the value of an individual property. "If a property is surrounded by other homes that have been neglected or are dilapidated, it could dampen the value of the property. The same goes for properties next to vacant land that could attract squatters. A well-looked-after home within a well-maintained and developed area will see a growth in value due to the supply of new properties being limited to the homes that already exist. A limited supply of properties within an area will keep the prices buoyant," said Goslett.
Further indication that an area has potential for strong investment returns is the level of commercial activity and corporate investment in the area. "Large national retailers and property developers will complete thorough market research and analysis on an area before they consider making a substantial investment. The presence of residential and commercial property development, along with long-established or well-known brands within the surrounds, will indicate that there is a level of confidence that the area has good growth potential," advised Goslett.
Accessibility
Another aspect of location is accessibility. Goslett said that given the fact that public transportation in South Africa is not always easily accessible, many have to drive long distances to their place of employment every day. A good location is one that has easy access to major transport routes and highways, as well as other modes of transportation such as the Gautrain or bus stations. "While it is good to be within proximity to major transport routes, being too close is not ideal as it could expose the property to a significant amount of noise. The key is to find the right balance when choosing the right location," he added.
Proximity to quality amenities, which includes shopping and medical facilities, entertainment areas, restaurants, public services and schools is also another factor to consider when determining the perfect location. "Convenience is a highly valued commodity in today's modern age," said Goslett.
"In reality the saying location, location, location refers to a convergence of various factors that work in harmony to ensure the sustainable long-term value of a property. While finding the right property may take some time and research, the future benefits of solid growth in the value of the property will certainly make it worthwhile," he concluded.